Oil Products Summary at European Close: Diesel Eases after Russia Ban

Diesel markets have steadied after the initial surge higher yesterday on the reports of the ban on Russian diesel and gasoline exports. The European Gasoil-Brent spread is today holding steady at 34.5$/bbl but below the peak of just over 37$/bbl yesterday. The risk of tight global supplies has helped maintain the strong curve backwardation.

• Gasoil OCT 23 down -2.5% at 982.25$/mt
• ULSD OCT 23 down -0.5% at 3.35$/gal
• EU Gasoil-Brent down -0.9$/bbl at 33.55$/bbl
• US ULSD crack down -1.4$/bbl at 47.24$/bbl
• Russia gasoline/diesel ban is likely to last 6-week according to Citi analysts. The bank said a prolonged ban of these fuels would not be in Russia’s interests and it could end up shutting in crude production.
• JP Morgan expects the ban to last a “couple of weeks, until harvest concludes in October.”
• According to industry consultant FGE, “Once domestic supplies are replenished, Russia will have to resume exports due to a lack of spare storage capacity.” At the latest, Russian diesel exports are expected to resume in two weeks, possibly earlier, FGE said.
• Russian wholesale gasoline and diesel prices are tumbling Friday after the ban on exports of the grades from the country. Prices for Russia's wholesale gasoline Ai-92 grade fell by 9.7% on the St. Petersburg International Mercantile Exchange (SPIMEX) on Friday. Diesel prices were down by 7.5%.
• Bloomberg vessel tracking has flagged clean tankers bound for Russian diesel exporting ports going under anchorage because of yesterdays ban.
• Extraction from the Groningen gas field in the northeastern Netherlands will come to a halt in October this year, according to government statement.
• ATA expects the air travel demand in the Asia-Pacific to recovery to 2019 levels next year, according to Willie Walsh, Director General of International Air Transport Association, speaking at the 2023 North Bund International Aviation Forum in Shanghai.
• Russia’s halt to exports of diesel and gasoline will “aggravate” an already tight oil market ahead of winter, according to the IEA as reported by the FT.